Kenyatta University technically insolvent, says Auditor General
Kenyatta University is in financial dire straits and may not meet its mandate in future, a new report shows.
The report says current liabilities amounting to Sh5.8 billion exceed the assets of Sh1.6 billion, resulting in a negative working capital of Sh3.8 billion.
The report by the Auditor General Nancy Gathungu shows that the university is financing its operations using costly short-term borrowing which may worsen the liquidity position.
“The university is technically insolvent and it may not be able to meet its mandate in future,” reads the report.
According to the report, the university has not been able to remit pension and taxes amounting to Sh2.9 billion, audit fees of Sh6.4 million and other deductions of Sh412.3 million to beneficiaries thus risking fines and penalties.
“Although the university management has put in place stringent cost cutting and revenue enhancement measures to address the financial challenges, the debt remains unpaid,” reads the report.
Regarding land, Gathungu says out of 445.17 hectares which the main campus of the university sits, some 12.472 hectares had been illegally encroached on by informal settlers.
“Although the university has filed a case in a court of law against the illegal encroachment, the matter has not been determined and the informal settlers have continued to erect buildings on the land.
On car loans, Gathungu says that Sh1.4 million relating to car loans due from four officers who have since left the university had been outstanding for a long time while imprests amount to Sh9.4 million had been outstanding for over one year.
On ethnic diversity, Gathungu said the university staff data revealed that one ethnic community accounted for 40 per cent of council members, 45.4 per cent of senior management and 40.7 per cent of permanent staff, which is contrary to section 7(2) of the National Cohesion and Integration Act.